NEWS

New legal Axiom in the city: New York outsourcing service expands to San Francisco

The Recorder
23 August 2006
By Petra Pasternak

Like many corporate lawyers, Yahoo Inc.'s Matthew Robinson likes to keep as much work in house as possible.

But when the acting associate general counsel found he was down several staffers earlier this year, he considered tapping a traditional law firm for extra manpower. Not sure that he'd be able to keep a lawyer busy full time within budgetary constraints, however, he instead opted to try something new.

He hired Axiom Legal attorney Christopher Vail. For several months this spring, Vail became a full-time member of the legal team, covering trademark and regulatory matters for Yahoo's new products division while Robinson recruited full-time staff.

The move, Robinson said, turned out to be a cost-effective solution to a temporary problem.
Run like a consulting firm, Axiom rents attorneys to corporate departments whenever and for however long they are needed. Both Axiom and Robinson declined to disclose the rates Yahoo paid. In general, though, work that can be done by a lawyer billing several hundred at a traditional firm can be taken care of by an Axiom lawyer for an hour-by-hour rate of $180, according to Mehul Patel, who now heads Axiom's brand new San Francisco office.

"As the work ebbs and flows, we can use Axiom to meet our needs," Robinson said.
Founded six years ago in New York City, Axiom is on the move. The company opened a San Francisco office this past March — its first location outside of New York.

The company is fueled in part by an $8 million investment from Benchmark Capital general partner Bob Kagle, who is known for investing in technology companies such as eBay Inc.
Kagle said the founders' enthusiasm and ambition were what first impressed him. He also believes in Axiom's growth potential.

"We never invest in a company unless we think we can make at least 10 times our investment," Kagle said. "This could be a company with billion-dollar revenue potential and a multibillion-dollar market cap over time."

But there are skeptics. Legal recruiter Gary Davis, who makes full-time placements at companies like Yahoo — and said he does not view Axiom as a competitor — did point out that it is hard enough for an out-of-state firm with a strong name to compete at first in Silicon Valley. It will be even tougher for Axiom, he said.

"It's a function of getting your brand name out there, of getting significant partners with established credibility amongst the client base," he said. "Until I see Axiom land high-profile [lawyers] with Silicon Valley credentials, I think they have no chance."

Even Yahoo's Robinson agreed that law firms will continue to perform an important service as outside counsel that Axiom's compelling rates and fluid workforce can't match. "The power that a law firm brings is the collective wisdom of not just one lawyer, but the whole firm of lawyers. That's a hurdle Axiom will have to face."

The company has gained traction on the East Coast, where the client roster includes some of the largest investment banks, among them Goldman Sachs and Morgan Stanley, and media conglomerates such as Reuters and Dow Jones.

Axiom founder and CEO Mark Harris said the long-term ambition is to grow from 250 attorneys with two offices to an international firm of 1,000 lawyers in the next few years.
So far, audiences here have been receptive, Harris said.

Axiom's leaders are busy networking with potential clients and recruiting seasoned lawyers. Long-time client Cisco, for example, has doubled the number of Axiom lawyers it employs locally since April. Next to big Bay Area companies, Axiom also targets emerging businesses and late-stage companies preparing to go public within the next year.

"It took us 2.5 years in New York what'll take us four or five months here," Harris said. "This is a very entrepreneurial, fluid micro-economy. There's a much greater appetite for innovation here, which translates into a willingness to try new things."

As the firm's S.F. general manager, Patel, the former marketing manager at Howard, Rice, Nemerovski, Canady, Falk & Rabkin, is in charge of local outreach and recruiting. He said the average attorney has 15 years of combined in-house and law firm experience. "The Bay Area office received 600 resumes, and accepted 35," Patel said.

By shaving off 60 percent of traditional law firm costs, including posh offices, associate salaries and partner profits, its pitch revolves around the idea that Axiom is able to pass savings on to clients.

Axiom's appeal to the seasoned attorney is in the flexibility of engagements and the variety of assignments.

Vail, an attorney who joined Axiom in March, said he has held just about every title in the legal world. Early in his 25-year career, he was a complex business litigator in the Los Angeles area. In 1989, he joined AT&T's in-house legal department, where he climbed through the ranks to senior attorney. Then he founded Excite.com's law department and went on to be the company's one and only GC.

"As you advance in your legal career, certainly in the in-house career, you spend more and more time managing everything and less time helping the client," the 45-year-old said. "The Axiom team takes care of the management, and that frees me up to do the fun stuff."

Vail was fully integrated into Yahoo's new products department, working closely with a team of about six lawyers. "There's been no hesitancy about exposing me to very deep and far-thinking strategic planning," he said. "I like new things, I like peeking over the edge of the future. It's been very gratifying."

But, Vail adds, it isn't for everyone. The same lack of certainty that thrills him can be a bane for someone else. When Vail's assignment with Yahoo wrapped up, Axiom didn't have another ready immediately. "There could be a gap," Vail said. "There could be only work two days a week.
"For some people a lack of structure can be very liberating, and I'm one of those people. For other people, a lack of structure can be very anxiety provoking."